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Thursday, April 29th, 2010
Hi all … Here is the last of my 3 articles on Pricing and what you should charge for your great photos. This articles deals with the concept of value added pricing. This strategy is widely promoted in the B2B (Business to Business) Sale, particularly in the delivery of complex systems. It is based on the principle of fixing your price based on the value it delivers your customer e.g. Let’s say you develop a specialist purchasing software that can save the potential customers company 200,000 a year. At what price do you pitch your solution? 5000, 50000, 100000 what about 200,000 over 3 years? They save 600,000 over 3 years less the 200,000 they pay you, meaning the still have a net saving of 400,000. Could you sell this system at this price? Why not?, is every one not a winner at this price. This method of determining prices needs highly trained sales people and the more complex the solution the more effective it is. So as photographers what can we learn from value added pricing strategies and how can we used value added pricing for a wedding album or indeed a quality portrait?
Well let’s think about this one… what is the value of quality wedding photography? … Precious memories that will not be repeated again … a timeless keepsake reminder of the day a woman dreams about since being a little girl … and if that was not enough probably the only memory spark she will have of one of the most hectic days of her life … Think about it, If you are married how much of your wedding day do you actually remember? If you are like most I have talked to … very little. So in fact your great photos are in fact priceless … I have spoken to many a bride after getting lousy photos taken by unprofessional photographers who still cry when they think about their wedding album keepsake.
While you may not be able to use value added pricing strategy to fix your price at crazy figures you should be able to use the principle of value added pricing to justify why you charge the price a professional album sells for. Why not show the bride the difference between what you supply and an amateur will supply… Show her the value of what you as a professional provide. Use effective questioning to determine her budget and show her how you add value to ensure she has quality lasting memories forever of her dream day which is typically a forgotten haze without the memory spark of quality photography.
I hope you have gotten something from my 3 articles on pricing and I look forward to your comments and suggestions. If there is a sale’s or marketing topic you would like me to address please post a moment here or email me at pvphotoman@photovalue.com.
PV Photoman
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Tags: business, effective questioning;selling process; photographer;selling wedding albums; wedding album videos, gem collection, great communicators, I nobili, I Nobili Modern wedding albums, marketing tips, negotiation with the bride on wedding album package, perceived value, Photo books, photo presentation products, photographers england scotland wales and ireland, photographers in UK and Ireland, photographic folder, photography, photovalue, professional photographer, PV Photoman, Rubens, sales tips, slip-in-folders, strut mounts, wedding albums, what do i sell my photos for, www.photovalue.com
Friday, April 2nd, 2010
Hi All Again. Following my last article answering the above great question… here is the second article on pricing in the series of three. Hopefully at the end of these articles you will have all the possible pricing strategies
So the second pricing strategy is Competitor Analysis Pricing. Competitor Analysis is a tool often used in strategy development particularly with the Strength & Weaknesses dimensions of the SWOT analysis tool. Strengths and Weaknesses are internal business considerations targeted at your internal company. To qualify to be a “Strength” it must be something that you are better than your competition at… For example Ryanair are known to have a much lower cost base than much of their competition and is therefore a definite Strength. For something to be a weakness again it should be measured against the competition… Right now Willie Walsh the CEO of British Airways probably regards the unionised culture within BA as a weakness when comparing BA to Ryanair. I hope this explains the S&W parts of SWOT. So what has this to do with pricing?
Well often some companies do “Competitor Analysis Pricing” by looking simply at what their competition charge for something and then just matching or indeed beating it. Have you done this? … I have in the past … and what a fatal mistake when done on its own. Why is it a fatal mistake on its own? Well it takes no account of measuring your actual costs which could result in you selling below cost … Even worse what if your costs were higher than your competitors and you pitched your prices lower? What then … Well you could start a price war against a competitor who can beat you in this price war will eventually put you out of business.
Another strategy often employed is “Asking the customer what they are willing to pay?” Again accepting these prices without knowing your costs or indeed your competitors pricing can cause you to do work at a loss or again significantly undercut a competitor and start an unnecessary price war. I am not saying not to ask the customer what they are willing to pay as this can be a great way to identify their available budget but make sure if you ask them this that you know what you can offer them for this price and still make a profit.
The above of blindly just doing something reminds me of something my Mother used to say when I used to use my Brother as an excuse to justify doing something wrong … My Mother used to say “If my brother jumped off a cliff would I jump off after him” … Guess she didn’t know I was a superhero who could fly … eh!
Next week we will discuss Value – added pricing in the last of these pricing articles.
Bye for now
PV Photoman
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Tags: business, effective questioning;selling process; photographer;selling wedding albums; wedding album videos, I nobili, I Nobili Modern wedding albums, marketing tips, negotiation with the bride on wedding album package, perceived value, Photo books, photo presentation products, photographers england scotland wales and ireland, photographers in UK and Ireland, photographic folder, photography, professional photographer, PV Photoman, Rubens, sales tips, slip-in-folders, strut mounts, wedding albums, www.photovalue.com
Thursday, March 18th, 2010
Hi all … it’ great to be back following a break in this blog due to a very busy stage in the Masters I am currently doing in Sales Management, which is focusing on the quality of online customer service at the pre-purchase stage of the buying process from the perspective of the buyer. Anyway back to this first article on pricing policy resulting from the above question put to me by a photographer in the last few weeks… I take great photos but what should I charge for them?
This question is a very broad question and can be affected by a whole number of other issues. However for now let’s visit the types of recognised pricing strategies which include the following four core strategies of: 1.Cost plus pricing; 2. Competitor Analysis Pricing; 3. Customer request pricing and 4. Added value based pricing. So let’s have a quick look at all these four pricing strategies. This week’s article will focus on the first of these which is Cost plus pricing.
Cost plus pricing – This is the method promoted by most accountants and works on the principle of knowing your total costs for a year, how many units you expect to sell adding a profit margin and fixing your price from there. So to look at this in a simple let’s say you do weddings only, you only have one wedding album package on offer, expect to sell 50 weddings a year and have total costs of £75,000 a year to cover all my costs for the year including salary, lighting heating transport and whatever 50 albums are going to cost me. On this basis your album package would need to be £75,000 divided 50 weddings which is £1500 per wedding. You should add a profit margin to this which you keep as retained profit. Most small businesses do not build a retained profit reserve for those rainy days that always happen as our economy as it works through the standard economic cycle of boom-bust. So let’s say we are going to add 10% for retained profit. Then our average package price for 50 weddings a year is £1500 plus 10% which is £1650. So I hear you say that I have more than one package well then your average package price must be £1650. So how can you ensure this… well firstly lets introduce 4 more packages including the dreaded but increasing disc only wedding. So let’s price these options up … but first let’s decide what the cost of the album including prints is for our £1650(incl. vat) wedding. Let’s set this at £350 (incl. vat). So what should our disc only wedding album cost for us to keep our margin? The answer is £1650 less £350 which is £1300. So Disc only will be £1300. Our next package will be £1650 and let’s say our top package album which will be say the Magnum which costs £720 then this package as a minimum should be £1650 plus (£720-£350) which is £2120, however this would be a minimum and I would add a few hundred to this to reflect the higher album cost and say £2400.
The advantages of doing your pricing this way is that you are guaranteed to cover your costs on 50 weddings regardless of how many of each package you sell with the added benefit (cream) on every top package you sell.
The disadvantage of this pricing policy is that it is making the assumption that you will sell 50 wedding packages; that your competition is selling much lower or perhaps higher for a similar offering or worse still you customer perceives this as very good value and would be willing to pay more for your offerings so you are leaving money on the table.
In my next article I will look at the other pricing policies and then we will look at various selling strategies that might allow you achieve the highest price possible for your great photos.
Would you like photoval.com to create and publish a FREE cost plus calculator to help you calculate your pricing? Remember to allow for Vat in your pricing calculations or you could find yourself down an unexpected 17.5% when your accountant gives you your vat bill for the year.
Bye for now.
PV Photoman
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Tags: business, cost plus pricing, effective questioning;selling process; photographer;selling wedding albums; wedding album videos, gem collection, great communicators, I Nobili Modern wedding albums, marketing tips, photo presentation products, photographic folder, photovalue, professional photographer, PV Photoman, sales tips, slip-in-folders, strut mounts, wedding albums, what do i sell my photos for, www.photovalue.com
Tuesday, January 26th, 2010
Ok “perception of Value” lets break this into pieces. What does “perception” mean? Well one of the definitions of perception on your.dictionary.com is “the act of perceiving or the ability to perceive; mental grasp of objects, qualities, etc. by means of the senses; awareness; comprehension” and one of their definitions of value is “estimated or appraised worth or price; valuation”. So when we put these two together we get perceived value meaning someone using their senses to determine its estimated worth to them… Wow… this got me really thinking as how can we learn from this idea of ‘perceived value’ as a profession?
Then I start thinking as to who really does this ‘perception of value’ thing really well? And then I remembered the last time I went shopping and ended up in the cosmetics department of a large store… the beautiful smells … the well presented ladies encouraging you to try their makeup or perfume … the amazingly designed packaging that leaves an impression of luxury. That’s it they are the masters of this “perception of luxury value” and it reminded me of a test done many years ago in the US. The test consisted of the following; side by side on a shelf were the same brand of perfume … one in a nice bottle at $12.99 and the other nicely presented in a beautiful perfume box at $22.99. Which one sold most?…I at the first time of reading this said … sure the $12.99 bottle had to sell more if it’s the same perfume… guess what I was wrong … the nicely packaged bottle outsold the other bottle four to one or by 400%. The cosmetics industry are the masters at presenting their offerings in away to maximise the “perceived value” of their customers.
So what can we learn from this? How many photographers do you know who present their prints as prints only? How many present their work on CD or DVD only? While there is nothing wrong with this i.e. there is always a market for a ‘low cost product’ there is even such in the cosmetics industry … I would encourage you to think carefully before you depart down this way.
If you are doing an event and it does not warrant a wooden or acrylic frame at least put it in a photographic strut mount or folder and brand this mount or folder with your name. This does not add much expense but it will add to the ‘perceived value’ to your customer when you present them your print.
Now for the sales pitch from my sponsor photovalue.com who always offer a FREE blocking service on their gem collection range of photographic folders and strut mounts … but for the months of January and February we are going one better … normally there is a once off set up charge of £40/€40 for the block but even this will be waived if you quote this blog exert. Just email Hannah or Ronan at sales@photovalue.com and quote the reference : “Blog cosmetics”.
Bye for now… If you have any ideas, thoughts or suggestions on any topics you would like me to blog about please leave a comment here or email me at pvphotoman@photovalue.com
Many Thanks
PV Photoman
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Tags: business, effective questioning;selling process; photographer;selling wedding albums; wedding album videos, gem collection, I Nobili Modern wedding albums, marketing tips, perceived value, photo presentation products, photographers england scotland wales and ireland, photographic folder, photography, photovalue, professional photographer, PV Photoman, sales tips, slip-in-folders, strut mounts, www.photovalue.com
Wednesday, January 13th, 2010
Hi All,
PV Photoman here… It’s very hard to believe that it is 8 weeks since I started this sales & marketing blog with the aim of delivering you thoughts and ideas around sales & marketing. I have attempted this every week so far but only you can judge. This week however I will depart a little and help out my boss Ronan Ryle Sales & Marketing Director of Photovalue.com who indeed was my creator and employer… This is one of his biggest weekends of the year … the SWPP annual convention where Photovalue are a Gold Sponsor.
So back to my boss… I know he spends allot of time preparing deals that might appeal to our customers for the coming year. Before we analysis the marketing thoughts behind these deals and if there is anything we can learn from or transfer to a photography business let’s look at these deals open to photographer’s across England, Scotland, Wales, Northern Ireland and the Republic of Ireland.
Here they are:
Free Blocking on Folders & Mounts
Ok so what was going through my bosses marketing mind when he created this? Yeah I can see the win:win for both the Photographer & Photovalue. The win for the photographer is a FREE way to promote your business … by blocking your folders & strut mounts allows you to present your photography in photographic folders and strut mounts that carry your name. This means every time someone sees your work they see your details just like when someone views a painting and the artists signature is there… and the advantage to Photovalue? … well provided the price is no more or indeed better you are probably going to be more loyal to Photovalue rather than changing. So my question to you is how can you make your customer more loyal? (Why not see my blog on the LTV of your bride…)
OK so what other offer do they have:
I like this one… what does it try and achieve? Firstly it try’s and make it easier on you to offer the Photovalue.com offering … however it also has your customer in mind or as already referred to in a previous blog we need tom think about our customers customer. Ronan try’s to achieve this in this offering by allowing your customer (the bride) have access to the all the possibilities. I know he is my boss but the 10/10/10 offer is genius… the benefit to you as a customer is obvious … you can get your already heavily discounted £350 in studio samples back but to achieve this you must become a loyal customer. So how can you do this with your customers?… and make sure you achieve the LTV.
So his next offer is what?
Again from what I can see … not one or two but three win:win situations. You as Photovalue’s customer win in that by buying from photovalue you get rewarded for being a loyal customer by getting albums for FREE, Photovalue gain’s by having loyal customers, win:win. What can you do to create win:win scenario’s for your customers?
How can you create win:win in your business?
Hope you enjoyed this slight departure from my usual blog topics. If you can visit Ronan & Hannah at SWPP 2010 in the Novotel London West between 15th & 17th of January. Unfortunately I cannot be there in person … You know us superhero’s … busy flying here and there … doing our best to save mankind.
Talk to you all again next week.
PV Photoman
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Tags: business, Da Vinci, effective questioning;selling process; photographer;selling wedding albums; wedding album videos, gem collection, great communicators, I nobili, I Nobili Modern wedding albums, marketing tips, Photo books, photo presentation products, photographers in UK and Ireland, photographic folder, photography, photovalue, professional photographer, PV Photoman, Rubens, sales tips, slip-in-folders, strut mounts, swpp 2010 london, wedding albums, www.photovalue.com
Tuesday, January 5th, 2010
Doesn’t every profession have its sayings and unique lingo that mean’s something to that profession. So when the marketers talk about LTV or Lifetime Value of a customer … what do they actually mean? Well my understanding of LTV is … how much a customer or opportunity may be worth to you over their lifetime. What relevance is that to me … Sure most brides get married just once or maybe a second time? … I hear you say … and I agree.. but what LTV means is what other opportunities might arise and how do you place yourself so that you can get further business from each opportunity you create and therefore maximise the LTV from your customer base… and ensure a bigger pay packet from each of your customers.
OK before we start on these possible opportunities to maximise the LTV …just one thing… The hardest and most costly part of getting a new customer is acquiring them in the first place … so we should absolutely do everything in the most professional way we can to ensure we get repeat business from them … another reason to maximise the LTV… OK but how? … Well here are a few ideas and I am sure you will have many more … If you do please add them as a comment on this blog so everyone can benefit from them.
Idea 1 – How many of you give each Bride and Groom a voucher of a sitting for their first child? OK not everyone have Children but allot do. At what stage in a person’s like is spent most on Photography and by whom? … Have you guessed yet? … After the birth of the first child and by the new proud Mother … It might take a few years for this to come to fruition but I bet the Bride/New Mother will remember she has the voucher you gave her when they collected their album and that she uses this voucher as the reason why … in her negotiation with her husband … that there should be professional photography done.
Idea 2 – Leading on from Idea 1… when they partake of this ‘first child’ sitting and order loads of framed pictures … bet they do … what do you do … Well depending on their religion or practises is there anything there you could give a voucher for? You know your culture and religious practise best so think about that one… and yes of course you give another voucher for the possibility of another new child sitting… or family portrait … or first birthday … or anything else you think is worth a try.
Idea 3 – What is likely to be another major event and not trying to be morbid or anything but probably death of someone close to your past customer. In fact I know a Photographer who at every wedding takes a very good shot of any grandparents at the wedding … What I hear you say … well yes it makes perfect sense after he explained it to me as follows … Who on the law of averages will be the next one to pass on? … Yeah the grand parents … and when they need a good photo for the memorial cards guess where they come … in fact guess who supplies them the memorial cards? Right the photographer who took the quality shots of the grandparents at the wedding and he sells lots of them… now that photographer really understands LTV. I suggested to him that they may in fact like to have a memorial book on the life of their dearly loved one and he could offer them the additional service of producing this for them from old photographs etc. I believe he has plans for this in 2010.
There are hundreds of other things you could do and the best person to come up with these is you. You know your customers best … you know your culture … your market … your countries customs way better than me. So take some time to think about the concept of LTV for you and come up with ways to maximise the LTV opportunity of all your customers.
Go for it … and in so doing create a bigger pay packet with more money for yourself rather than the poor guy in the cartoon above.
For those of you who are attending SWPP 2010 in London next week, come along and see the wide range of photographic slip in folders and strut mounts, traditional I Nobili wedding albums, modern digital I Nobili albums and our range of memories photo book albums including the Rubens & Da Vinci. I may not be there in person myself … us superhero’s can never plan anything as you never know when someone needs to be rescued but my colleagues Hannah Radhi & Ronan Ryle will look after you well.
Happy Snapping everyone
PV Photoman
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Tags: business, effective questioning;selling process; photographer;selling wedding albums; wedding album videos, gem collection, I Nobili Modern wedding albums, Lifetime value (LTV), marketing tips, negotiation with the bride on wedding album package, photo presentation products, photographers in UK and Ireland, photographic folder, photography, photovalue, professional photographer, PV Photoman, sales tips, slip-in-folders, strut mounts, swpp 2010 london, wedding albums, www.photovalue.com
